Free Cash Flow Correlation With Financial Assets

In recent years, China’s non-financial enterprise of the financial asset investment showed a larger increase. According to statistics, in2006to invest in the securities of a listed company has335, in2007to invest in the securities of a listed company has538, in2008to invest in the securities of a listed company has564,2009, although the stock market suffered a landslide from the2008’s high fall, to invest in securities of listed companies still have609. However, the vast majority of listed companies and has the advantage of not owned financial enterprises in taxation, information, expertise, etc., can not fully grasp the effect of investments in securities. In addition, large-scale enterprises to invest in financial assets in short-term profit at the same time will be on healthy and sustainable development of enterprises had a huge impact. In this context, on enterprise funding sources and the impact of financial asset investment factors gradually deepening.Papers From the start of free cash flow theory, select the sample data1475A-share listed companies in2009to2012from between, on the relevance of financial assets and other issues related to corporate investment behavior and free cash flow were between empirical test. Results obtained, free cash flow and enterprise-scale financial assets held by the amount of investment growth showed a weak positive correlation; FCF indeed there is a "controlling effect liabilities", but this liability only in the control effect was short-term debt significant manifestation; another stake in the controlling shareholder can increase free cash flow for the operators misuse of conduct to curb the generation of investment in financial assets.